Title Issues

The job of searching the public records to identify existing rights and
interests is not an easy task. The title searcher or abstracter reviews the
public records to find all aspects of title, which can be seen and recognized.
From the title search, the title examiner produces an opinion of title, from
which the Company will issue its insurance.

In many areas, the title to a property can be traced back to a royal grant,
charter, or the United States government. In many areas, titles are not traced
back that far; instead, local custom or title insurance company requirements
dictate a shorter search.

There are few titles, if any, that have a perfect history from their
source, or root, to the present day. Each transfer of ownership is a
link in what is referred to as the chain of title. As each
transaction or link takes place, there is a potential for a problem. Even if
the entire chain of title appears to be in order, the chain is still subject
to interpretation. When searching a title, what we are trying to determine are
the various rights and interests that make up each link in the chain as it has
passed from one owner to another.

A title is composed of three basic elements:

Rights and interests that are disclosed in the public records or by
physical inspection of the property, i.e., deeds, mortgages, leases, etc.,
parties in possession, utility easements, etc.

Rights and interests that are not recorded but exist, i.e., limitations
imposed by laws and statutes, etc.

Rights and interests that are hidden, i.e., forgeries, secret marriages
and unknown heirs.

Every title is made up of many different rights and
interests that may be owned by different people. The owners
of the property own the most valuable of the property’s rights and interests,
but other people may also have rights to the property, such as easements for
utilities or mortgages, etc.

Each title can be compared to sticks in a bundle. The rights and interests
are represented by the sticks. The owners own what we call a fee
simple title, that is, they have purchased the most vital and valuable
sticks including rights of possession, use, occupancy, enjoyment, inheritance,
etc. Also, within the bundle are sticks that may be owned by other parties.
These are called encumbrances and may consist of easements, mortgages, liens,
etc.

When a person purchases a parcel of real estate, it is not only the
physical property itself that he or she acquires, but the sellers rights and
interests, the seller’s title, in the property. It is essential for
the prospective purchaser to know before the transaction takes place,
precisely what rights or interests the seller can convey. The purchaser also
needs to know who else may have rights or interest in the property, and about
any encumbrances against the property that may affect the use or enjoyment of
the land. The title search must cover all these rights and interests.